The Loose Women host was facing an estimated £124,000 tax bill for contracts held with the BBC between 2015 and 2017, with HMRC arguing that Adams was not a freelancer and should have been operating inside IR35. However, the Upper Tier Tribunal upheld the original decision, made by the First-Tier Tribunal in 2019, which found Adams to be working outside of IR35.
Background to the appeal
In 2019, Kaye Adams successfully appealed HMRC’s challenge to her self-employed status that spanned her engagement with the BBC as a presenter of ‘The Kaye Adams Programme’ during the 2015/16 and 2016/17 years. The presenter, who is well known for her appearances on ITV’s Loose Women’ and ‘Paper Review’ on Sky News, has successfully won her long-running IR35 case after the Upper Tier Tribunal upheld the previous ruling that deemed her engagements outside of IR35.
Adams was facing an estimated £124,000 tax bill for contracts held with the BBC between 2015 and 2017, with HMRC arguing that Adams was not a freelancer and should have been operating inside IR35. Ultimately, the array of work undertaken by Adams swung the final decision concerning her status in her favour. The presenter provided her services to the BBC through her company, Atholl House Productions Limited. However, her services are not exclusive to the BBC or as a broadcaster – she also appears on Sky News, is a well-known face of ITV’s Loose Women panel, and writes regular columns for various magazines and newspapers.
Judge rules Adams in ‘business on her own account’
The Judges in the latest ruling confirmed the original decision made in the First Tier Tribunal in 2019 – Ms Adams provided a personal service, an element of Mutuality of Obligation existed, and the BBC held editorial control over the provision of services.
When Adams entered into her contracts, the judge stated that she “would have been entering into business on her own account.” This was mainly because the presenter provided her services on various projects simultaneously, not exclusively to TV.
Andy Chamberlain, Director of Policy at the self-employment trade association, IPSE, said:
“This case once again demonstrates the complexity of the IR35 rules and the difficulty that end-clients will face when the responsibility for making status determinations passes to them this April.
The Upper Tier Tribunal upheld the First Tier Tribunal view that despite the three main status tests pointing to this being a contract of service – and therefore caught by IR35 – IR35, in fact, did not apply because Kaye Adams was in business on her own account.
The question now will be how end-clients will be able to make informed decisions. Only the contractor can know whether they are in business on their own account, as they have sufficient knowledge of their company’s business activities.”
In light of the upcoming off-payroll in the private sector reforms, Chamberlain added:
“[The] Government should […] carefully consider the implications of this judgement and work with us and other stakeholders to devise a more practical approach to compliance – one which would protect the exchequer revenue without burdening business with rules that, evidently, even HMRC itself doesn’t understand.”
Changes to off-payroll in the private sector will be introduced from April 2021
Having been delayed for 12 months due to the coronavirus pandemic, changes to off-payroll in the private sector (IR35) will be coming into effect from April 2021. As a result, contractors currently operating through their limited company in the private sector will no longer be able to determine their IR35 status. Instead, it’ll become the end client’s responsibility (as long as they are classified as a medium or large-sized business).
Please take a look at our recent blogs to discover how the upcoming changes will impact limited company contractors and what private-sector organisations should have done to prepare for the off-payroll changes.
Speak to an expert to discover your payroll options today
If you are unsure about your payroll options in light of the upcoming changes or would like to discuss which you may be better suited to, please give our expert team a call on 01707 871622. We would be delighted to discuss your payroll options with you and provide further information about our range of FCSA accredited contractor services. Switching between Churchill Knight’s best-selling accountancy package and our PAYE umbrella payroll is very straightforward and cost-effective. We’re here to support you every step of the way.
About Churchill Knight
Founded by an IT Contractor in 1998, Churchill Knight has become one of the most respected contractor accountants in the UK. We’ve helped over 20,000 contractors with their accountancy requirements. As well as our accountancy services, we also have an industry-leading PAYE umbrella company and dedicated in-house personal tax department. Whichever service you choose, you can move forward with complete peace of mind. We are proud of the reputation we’ve built over the years, and our FCSA accreditation proves how committed we are to compliance within our sector. Keep reading…
The current law states quite clearly that only HMRC (or a tribunal, if HMRC’s decision is challenged) have the statutory authority to make determinations of IR35 status. The reason that the courts have the last word (and the contractor’s view is at best an informed opinion) is that IR35 status determinations requires a legal evaluation of the relative importance of the various established facts. Kaye Adams’ contracts with the BBC were outside IR35 because the court ruled that if she had made the contracts DIRECTLY with the BBC, she would have made them as a person in business on her own account, presently; and in part because she has historically made contracts with various parties as a person in business on her own account. The problem with IR35 is that you can’t know your tax liability unless HMRC have first made a status decision, and there is no access to a tax tribunal ruling until HMRC have made their decision. I spent seven years trying to persuade HMRC to make an IR35 status decision (refusing to submit CT returns until IR35 status was formally decided); eventually the Limited Company was closed down, but the correct tax liability was never decided!